With U.S. restaurant sales essentially flat, more chains are capitalizing on their brand equity with forays into licensed retail products. But the markets served, the products offered and the rationale behind these deals may be different than they were a few years ago. Here’s what licensing pros see as key motivators for brands seeking licensing deals today.
Reach your customers when they’re not in your restaurant
“We want to be where our fans are with products that make sense for the brand,” says Focus Brands Group President Kat Cole, who handles licensing for Cinnabon, Auntie Anne’s, Carvel and Moe’s. “They enjoy finding a version of our brand in the grocery store. Or they might enjoy the brand on a T-shirt, which creates energy and gives people bragging rights.”
Underline your brand image in novel ways
Cole says her group looks for “versions of what the brand is known for that might stand out in the marketplace.” Cinnabon stretched the brand based on an aroma, not just on cinnamon rolls. Over the years, Cinnabon has lent its name to scented candles and air freshener, as well as flavored vodka, creme liqueurs, coffee pods, coffee creamer and popcorn. Most of those products would make no sense for a less specialized brand.
Move into a new daypart
Some Cinnabon licensed products—refrigerated tubes of ready-to-bake cinnamon rolls, toaster pastries, pancake and waffle mixes, hot and cold cereals—let consumers experience the brand at home in the morning when the chain’s outlets are typically not open.
Punch above your weight class
That’s how Bill Cross—business development SVP for Broad Street Licensing Group, the consultant for Tony Roma’s Famous Ribs—describes licensing at the casual-dining chain, which has just 19 units in the U.S. The chain’s retail license for ready-to-eat ribs, pulled pork and pulled chicken generates $60 million each year—“which, for a medium-size to small chain, is serious money,” he says.
Build your brand globally
Tony Roma’s recently inked branded-meat deals with suppliers in Australia, New Zealand and Ireland. An agreement with Carrefour Spain will bring Tony Roma’s meats, sauces, cookies and potato chips to the hypermarkets. In Mexico, a deal with Wal-Mart subsidiary Superama will introduce retail customers to Tony Roma’s ribs, pulled meats, sandwiches and bowl meals.
Claim real estate in the most profitable supermarket areas
“The center of the store has been dead for 15 years,” says Cross. “The real money is in frozen foods, but you have to be best in class.”
Another growth opportunity, he adds, is fresh ready-to-eat and ready-to-heat foods like Tony Roma’s heat-and-serve pulled pork or fresh guacamole from Moe’s Southwest Grill.